India’s engineering industry

India’s engineering industry – liberalised and on the rise

India's engineering industry has grown by an annual average of 12 per cent for the past five years on the back of higher investment in infrastructure development and industrial production, new government initiatives, such as allowing 100 per cent foreign ownership of firms within the sector, and lowering customs duty.

As a result foreign companies have started expanding into the Indian market by setting up local manufacturing bases to support domestic demand and exports. This has seen the local machinery/capital equipment sector diversify to serve the needs of new technological developments.

India has a strong engineering and capital goods market. Engineering is India's largest industrial segment and accounts for nearly 3-4 per cent of the country's economy and employs more than 4 million skilled and semi-skilled workers.

The sector can be broken down into two main segments: heavy engineering and light engineering. Heavy engineering accounts for more than four-fifths of the sector and includes capital goods/machinery and equipment as well as transport equipment. Light engineering industry consists of castings, forgings and fasteners, process control instruments, medical and surgical instruments, and similar such equipment.